{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/505/20/#05-overview-and-background","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"505","topic_title":"Equity","subtopic":"505-20","subtopic_title":"Stock Dividends and Stock Splits","section":{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"505-20-05-1","para":"05-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FD96AAA8-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">This Subtopic addresses the accounting for stock dividends and stock splits. It includes guidance for the recipient as well as for the issuer. </span></span></div></div>","snippet":"This Subtopic addresses the accounting for stock dividends and stock splits. It includes guidance for the recipient as well as for the issuer.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4a1d790f20ad8e0c5dbdb18f0e5ebc078faa93127c41af21a885ba1345da49a4","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}},{"citation":"505-20-05-2","para":"05-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FD96AD06-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Many recipients of stock dividends look upon them as distributions of corporate earnings, and usually in an amount equivalent to the <a href=\"/glossary/f/#fair-value\" class=\"term\" title=\"The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.\"><span>fair value</span></a> of the additional shares received. If the issuances of stock dividends are so small in comparison with the shares previously outstanding, such issuances generally do not have any apparent effect on the share market price and, consequently, the fair value of the shares previously held remains substantially unchanged. </span></span></div></div>","snippet":"Many recipients of stock dividends look upon them as distributions of corporate earnings, and usually in an amount equivalent to the fair value of the additional shares received. If the issuances of stock dividends are s…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dda3bd49c80b023a5ce27f3435460cb5d7bf88fbc58a0b2cefd5ec671e2d7181","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}},{"citation":"505-20-05-3","para":"05-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><a href=\"/updates/asu-2010-01/\" class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2010-01</a>.</div></div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2010-01.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f3258f99c171884aed52bdfa6cf5d15dd20a1f62033999b52d2c55399d2e0fd1","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}},{"citation":"505-20-05-4","para":"05-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_FD96AE9E-6E92-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If there is an increase in the fair value of a recipient's holdings, such unrealized appreciation is not income. In the case of a <a href=\"/glossary/s/#stock-dividend\" class=\"term\" title=\"An issuance by a corporation of its own common shares to its common shareholders without consideration and under conditions indicating that such action is prompted mainly by a desire to give the recipient shareholders some ostensibly separate evidence of a part of their respective interests in accumulated corporate earnings without distribution of cash or other property that the board of directors deems necessary or desirable to retain in the business. A stock dividend takes nothing from the property of the corporation and adds nothing to the interests of the stockholders; that is, the corporation's property is not diminished and the interests of the stockholders are not increased. The proportional interest of each shareholder remains the same.\"><span>stock dividend</span></a> or <a href=\"/glossary/s/#stock-split\" class=\"term\" title=\"An issuance by a corporation of its own common shares to its common shareholders without consideration and under conditions indicating that such action is prompted mainly by a desire to increase the number of outstanding shares for the purpose of effecting a reduction in their unit market price and, thereby, of obtaining wider distribution and improved marketability of the shares. Sometimes called a stock split-up.\"><span>stock split</span></a>, there is no distribution, division, or severance of corporate assets. Moreover, there is nothing resulting therefrom that the shareholder can realize without parting with some of his or her proportionate interest in the corporation. </span></span></div></div>","snippet":"If there is an increase in the fair value of a recipient's holdings, such unrealized appreciation is not income. In the case of a stock dividend or stock split, there is no distribution, division, or severance of corpora…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a46975994de5224c295068247a5541ce18edf21dfa99b7d3f0768b1601554bf8","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}},{"citation":"505-20-05-5","para":"05-5","html":"<div class=\"asc-body\"><div class=\"norm-text\">See paragraph <a href=\"/asc/260/10/#260-10-55-12\" class=\"xref\">260-10-55-12</a> for earnings per share (EPS) guidance if the number of common shares outstanding increases as a result of a stock dividend or stock split.</div></div>","snippet":"See paragraph 260-10-55-12 for earnings per share (EPS) guidance if the number of common shares outstanding increases as a result of a stock dividend or stock split.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:328b5dcde729279e6356a1a986c2bb1f9d60d20dbd4e1038d9017cc288736a9d","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cb6614f206f96640776fac938fb00dd4cb1fe09a047091a86daeafb6cfc6ef23","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6caa936ac61cc94aec93504198e27c81f357c50474e8afef4b69f442accd03c2","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6caa936ac61cc94aec93504198e27c81f357c50474e8afef4b69f442accd03c2","downloaded_from":"2026-09-10T00:37:32.565Z","last_downloaded_at":"2026-09-10T00:37:32.565Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481468","source_sha256":"95d90a9c69ab4a4d3d4abda2dab6da2fc8c5dd8d49c5a50d03ed569946fede6d"}}